Gold and silver futures saw solid gains on Friday, as traders looked for haven assets that might perform better while the pace of economic growth in the U.S. slows. Gross domestic product data released by the Department of Commerce showed that while the economy continued to produce more – growing at an annual rate of 2.4 percent in the second quarter of 2010 – that figure was lower than a revised first-quarter number of 3.7 percent.
It was also beneath the 5 percent rate of growth last year.
The upside was a boost to the price of precious metals. Gold futures rose 0.6 percent to $1,178.20 per troy ounce, while silver started even stronger, surging almost 2 percent to $17.96 per ounce.
Gold is the metal more traditionally seen as a haven asset in times of economic crisis, but fears of deflation might be pushing some investors out of the trade. ETFs and big hedge funds have been selling off their gold recently, but that has caused some physical buyers – those who need gold futures to hedge their risk because they use the metal in jewelery or industry – to move into the market.
Many still feel that gold will break the $1,300 mark by year’s end.
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